How to Fix Your Credit Rating
1. Request the Most Recent Copies of Your Credit Reports
Before you start fixing a low credit score, you need to know what areas you need to work on. Your credit reports contain all the information you need to boost your score, and we recommend getting one from each of the three credit bureaus – Experian, TransUnion and Equifax.
Some lenders or creditors are only required to report to one bureau, and they don’t typically share information. That means you could have different information on each of your reports, so requesting all three will give you a comprehensive overview of your credit history.
You’re entitled to one free report each year, or you can order them directly from the bureau for a fee. After you’ve received them, make copies of each.
2. Look Over Your Reports
Once you’ve received your reports, read through each of them and become familiar with the information they contain. Use different color pens or highlighters to point out what needs to be fixed:
- Highlight any maxed out accounts that are over the credit limit.
- Mark any accounts that are past due, late, charged off or that have been sent to collections.
- Make note of any inaccuracies, including accounts that aren’t yours or payments that were reported late incorrectly.
3. Dispute Any Reporting Inaccuracies
If you find any false information in your credit reports, you have a right to dispute them. Your credit reports should have instructions for disputing inaccurate information, but you can write a letter to the credit bureau explaining the errors if they don’t. It’s helpful to send a copy of the report highlighting the inaccuracies.
4. Address Past Due Accounts
Your payment history makes up 35 percent of your final credit score, so several past due accounts can lead to a significant drop in your final rating. Paying off these past due accounts is crucial for fixing your credit. The goal is to have every past due account be reported as “paid” or “current.”
- Start by paying off accounts that are past due, but haven’t been charged-off yet. Do everything you can to prevent any more accounts from being charged off.
- Pay off your charged-off accounts.
- Work with debt collectors to pay your collection accounts.
5. Bring Your Maxed Out Accounts Below Their Limit
30 percent of your credit includes credit utilization, or your total debt compared to your total credit. Maxed out credit cards cost you credit points and over-the-limit fees. Bring them down below their limit and then work to pay off the remaining balance.
6. Apply for New Credit
Once you’ve settled the negative items on your credit report, start adding positive information to boost your score. Make sure any credit cards and loans are kept at a reasonable level and reported on time. Continue to do that to boost your credit.
You might have to open a new account in order to reestablish your credit. Past delinquencies can prevent you from being approved for a credit card, so only send out one application at a time. This keeps your credit inquiries low. If you’re denied, try a department store credit card or a secured credit card as a last resort.
Find Out More at Peake Chrysler Dodge Jeep RAM Fiat
If you have any questions about improving your credit score, the Peake Chrysler Dodge Jeep RAM Fiat finance department can help you. Our team of consultants are always available, and are happy to address any concerns you have with your credit.
Contact us online, or call (877) 270-4862 to speak with a representative from Peake Chrysler Dodge Jeep RAM Fiat.